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Realizing the Smart Grid: What It Will Take


(FM) DOE/NETL Modern Grid Strategy. GridWise. Program. GridWorks. NW GridWise ... Manage Smart Grid Task Force comprised of DOE, FERC, and National Institute of ... – PowerPoint PPT presentation

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Title: Realizing the Smart Grid: What It Will Take

Realizing the Smart Grid What It Will Take
  • RMEL 105th Annual Fall Convention
  • September 8, 2008
  • Vail, Colorado

  • What is the Smart Grid? What are its
    characteristics, and what technologies does it
  • What are the federal and state responsibilities
    in deploying the Smart Grid?
  • How will Advanced Metering Infrastructure (AMI)
    change the utility paradigm?
  • What are the challenges to Smart Grid/AMI

Origins Of The Smart Grid
  • Early 2000s Increasing awareness of aging
    power delivery infrastructure to meet surge in
    electricity demands and digital technologies
  • June 2001 EPRI Report stated that power outage
    and power quality disturbances cost US economy
    120 billion annually for all business sectors
  • Security and vulnerability of power delivery
    system heightened after 9/11
  • January 2002 EPRI launched Consortium for
    Electric Infrastructure to Support a Digital
    Society (CEIDS) to promote public/private
    partnerships to digitize power delivery system
    (now called Intelligrid)
  • President George W. Bush, Feb 23, 2002, Radio
  • America cant meet tomorrows energy needs with
    yesterdays infrastructure.
  • Energy Secretary Spencer Abraham, May 8, 2002,
    releasing the DOE National Transmission Grid
  • Americas electricity infrastructure is ill
    equipped to sustain our countrys needs today,
    and wholly insufficient to handle the growth in
    demand that is projected over the next few
  • 2002 National Research Council Report
    commissioned by the National Academies Making
    the Nation Safer The Role of Science and
    Technology in Countering Terrorism recommended
    technology be developed for an intelligent,
    adaptive power grid

What Does The System Look Like Today?
. . Local distribution systems that connect
the power supply to each consumer are effectively
a last bastion of analog, electromechanically
controlled industry. This is a particularly
notable paradox given the fact that the nations
electricity supply system powers the digital
revolution on which much of the current and
future value depends. -- The U.S. Electricity
Enterprise Past, Present, and Future Prospects,
Galvin Electricity Initiative (August 2005).
What is the smart grid?
  • Definitions and characteristics vary among
  • In H.R. 6, The Energy Independence and Security
    Act of 2007 (EISA), Congress defines the Smart
    Grid as embracing
  • . . . increased use of additional information
    controls to improve operation of the electric
    grid optimizing grid operations and resources to
    reflect the changing dynamics of the physical
    infrastructure and economic markets, while
    ensuring cybersecurity using and integrating
    distributed resources, including renewable
    resources developing and integrating demand
    response, demand-side resources, and
    energy-efficiency resources deploying smart
    technologies for metering, communications of grid
    operations and status, and distribution
    automation integrating smart appliances and
    other consumer devices deploying and integrating
    advanced electricity storage and peak-shaving
    technologies transferring information to
    consumers in a timely manner to allow control
    decisions developing standards for the
    communication and the interoperability of
    appliances and equipment connected to the
    electric grid identifying and lowering of
    unreasonable or unnecessary barriers to adoption
    of smart grid technologies, practices, and
  • This is too wordy
  • Fundamentally, it involves the integration of
    advanced communications and information
    technology into the electric grid (from
    generation to consumer) for enhanced grid
    operations, customer services, and environmental

Vision of the Smart Grid 7 Characteristics
  • Enabling informed participation by customers
  • Accommodating All Generation and Storage Options
    (Plug Play Capable)
  • Enabling New Products, Services and Markets
  • Providing the Power Quality For the 21st Century
  • Optimizing Asset Utilization and Operating
  • Addressing Disturbances Automated
    Prevention, Containment, and Restoration
  • Operating Resiliently Against Attacks and Natural
    Disasters (Self-healing)

Source DOE Smart Grid Implementation Workshop
June 2008
Schematic of the Smart Grid
Source EPRI (circa 2002)
Smart Grid Technology Areas
  • Advanced Metering Infrastructure (AMI)
  • Smart Meters
  • Two-way Communications
  • Consumer Portal
  • Home Area Network
  • Meter Data Management
  • Demand Response
  • Advanced Distribution Operations (ADO)
  • Distribution Management System with
  • advanced sensors
  • Advanced Outage Management (real-time)
  • DER Operations
  • Distribution Automation
  • Advanced Transmission Operations (ATO)
  • Substation Automation
  • Geographical Information System for Transmission
  • Wide Area Measurement System (WAMS)
  • Hi-speed information processing
  • Advanced protection and control
  • Modeling, simulation and visualization tools
  • Advanced Asset Management (AAM)
  • Advanced sensors
  • Integration of real time information with other

Source NETL Modern Grid Strategy
Organizations Working on Smart Grid Today
EPACT05 Hearings
DOE Smart Grid Task Force
GridWise Alliance
DOE-OE Grid 2030
Galvin Initiative
DOE/NETL Modern Grid Strategy
EPRI Intelligrid
NW GridWise Testbed
Open AMI
GridWise Program
Nat'l Labs
Source Eric Lightner, DOE Office of Electric
Delivery and Energy Reliability
EISA The Federal Role In Deploying The Smart Grid
  • Policy Statement
  • It is the policy of the United States to support
    the modernization of the electric transmission
    and distribution system to maintain reliability
    and infrastructure protection.
  • DOE Tasks
  • Submit Smart Grid System Report after first year
    and every two years
  • Form Smart Grid Advisory Committee
  • Manage Smart Grid Task Force comprised of DOE,
    FERC, and National Institute of Standards and
    Technologies (NIST)
  • Lead Smart Grid Technology Research, Development,
    and Demonstration program
  • Submit Study of security aspects of Smart Grid
  • Submit study of effect of private wire laws on
    CHP facilities
  • NIST Coordinates development of framework for
    protocols and model standards for information
    management for interoperability of smart grid
    devices and systems

State Responsibilities for Smart Grid Deployment
under EISA Section 1307
  • PURPA Directive -- each state must consider
    requiring electric utilities to demonstrate that,
    prior to investing in non-advanced grid
    technologies, Smart Grid technology is determined
    not to be appropriate
  • States required to consider allowing recovery of
    costs of qualified Smart Grid investments and
    recovery of remaining book value of assets made
    obsolete by Smart Grid
  • Requires consideration within first year of
    enactment, and concluded in 2 years
  • But state commission answer to all of these could
    still be NO

The Landscape for AMI
  • Automatic Meter Infrastructure (AMI)
  • First generation smart grid technology
  • Will pioneer the platform for customer
    interface with emerging technologies
  • Currently, 74 Smart Grid initiatives in 33
    states, which include utility-sponsored Automatic
    Meter Infrastructure (AMI) pilot programs at
    different stages
  • California taking most aggressive approach in
    authorizing deployment and cost recovery of AMI
    other states (DC, Maryland, Michigan, Texas) have
    pilots underway
  • One estimate 50 million existing meters replaced
    by smart meters by 2010 at 18 billion cost
    (Deutsche Bank)

AMI Deployment a New Utility Paradigm
Essential Smart Grid Elements
Challenges to Smart Grid Deployment
  • Technological
  • Lack of consistent standards and protocols means
    most systems can communicate only with
    technologies developed by same manufacturer
  • Limits interoperability of Smart Grid
    technologies and limits future choices for new
  • Need to future proof technology or risk having
    technology choice rendered obsolete
  • Management Culture
  • Some utilities embarked on aggressive deployment
    strategies (e.g., those exclusively in wires
  • But most risk averse, not wanting to bear
    entrepreneurial and technology risks not
    customarily early adopters
  • Timing of market entry is key not too soon or
    risk making wrong choice on technology

Challenges (cont.)
  • Regulatory Policy/Business Case Alignment
  • Groundwork essential to support utility capital
  • Regulators will be focused on cost-to-benefit
    ratio of capital expenditures, and not
    necessarily on utilitys revenue growth potential
  • Will regulators recognize societal benefits?
  • Cost allocation issues between customer classes
    benefiting from technology
  • Regulatory support essential for creation of new
    services envisioned from emerging technologies
  • February 2007 NARUC Resolution --guidelines for
    state commissions seeking to deploy
    cost-effective AMI includes consideration of
    intangible benefits, timely cost recovery of
    AMI expenditures, and accelerated cost recovery
    of existing metering infrastructure to generate
    cash for AMI deployment

Challenges (cont.)
  • Customer involvement and support
  • Early Pilots -- too early to tell whether
    customer involvement can be sustained year to
  • Uncertainty whether costs can justify benefits
  • Question of whether technology will create a
    digital divide between higher income and lower
    income customers
  • Will customers be better off with new

Final Thoughts
  • Experience from AMI pilots needs to be validated
    and tested
  • Lessons learned from multiple Smart Grid
    initiatives needs to be shared a collaborative
    information clearinghouse is being planned for
    establishment by DOE/EPRI
  • Consensus on the value of advanced Smart Grid
    technologies will be required of all stakeholders
    (utilities, regulators, customers) for merits to
    be realized

Robert W. Gee President Gee Strategies Group
LLC 7609 Brittany Parc Court Falls Church, VA
22304 U.S.A. 703.593.0116 703.698.2033